NEW YORK (Bloomberg) — US workers investing in 401(k) retirement savings plans have kept contributing throughout the financial crisis even as the value of their accounts plunged an average 27 percent, a Fidelity Investments survey said.

The average 401(k) balance fell to $50,200 in 2008 from $69,200 the previous year, Fidelity said in a study of their plan holders released this week. In 2008, 1.8 percent of workers took hardship withdrawals, compared with 1.6 percent in 2007, Fidelity said.

"Unlike previous downturns in the market, American workers recognise that having personal savings for their retirement is a need to have, not a nice to have," said Scott David, president of workplace investing at Boston-based Fidelity. "And so they are much more prudent about these investments." The study, compiled annually by the largest US administrator of 401(k) plans, comes as Washington policy makers re-evaluate how well the plans are working. At an October hearing of the House Education and Labour Committee, the Congressional Budget Office estimated workers lost $2 trillion in retirement savings over a span of 15 months.

Fidelity's survey of 17,095 corporate 401(k) plans it administers showed that investors aren't panicking, David said. Employees saved an average of $5,600 in 2008, slightly higher than in 2007. Fidelity compiles data on more than 11 million individual accounts. The retirement snapshot also showed more investors were ready for the decline with more diversified portfolios. The percentage of plan participants 100 percent invested in equities was 16 percent in 2008, compared with 37 percent in 2000. Most employees haven't changed their asset allocations, David said. The exception was workers with accounts of more than $250,000 where 37 percent rebalanced their investments.

Another trend reflects the growing popularity of funds designed to reduce the employee's decision-making responsibility. At the end of 2008, more than 60 percent of employers were using so-called lifecycle funds as a default contribution option, compared with five percent in 2005. Lifecycle funds automatically rebalance asset allocations according to a projected retirement date.